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Market Overview

Things Are about to Get Exciting

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Less than a week after announcing that we’re moving to the blockchain, we have another exciting product update for you today.

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Pages for $DASH, $LTC, $ETC, and $XRP are now taggable on the eToro social investment network!!

The number one request from our clients has been to open up access to more cryptomarkets, so here it is. Please note, that these instruments will not immediately be available for individual trading. As many of these markets have very low liquidity it will take a while before we are able to act as your market maker and guarantee instant transactions.

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However, as the main purpose is for investing, the first use will be as part of a Copyfund that will allow you to gain exposure to a wide array of crypto assets.

The aptly named CryptoFund is also up on the platform and should be available for investment shortly. Just to be able to tag these new markets on my wall was a big pleasure for me.

Mati Greenspan
eToro, Senior Market Analyst

 

Please note: All data, figures, and graphs are valid as of June 7th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

Today’s gonna be a strange day in the market mainly because of so much anticipation for tomorrow. In addition to the UK Elections, we’ll have a critical speech from the European Central Bank’s Mario Draghi, and a rare testimony from the former FBI director James Comey, you know the guy who Trump fired for being unfair to Hilary Clinton.

Comey is set to spill the beans about his conversations with the President in front of Congress and the world tomorrow afternoon. Depending on what he says, the markets could get volatile. President Trump will not be attending the event but rumor has it he will be live tweeting his thoughts.

The issue for investors is whether this whole Trump-Russia scandal will impair Donald’s ability to bring them infrastructure spending, as well as healthcare and tax reform. So the dicier things get the bigger impact we can expect.

The US Dollar is already feeling the Trump squeeze and falling steadily since the beginning of the year.

The stock markets, on the other hand, were performing swimmingly this year as the only thing they seem to care about is future profitability if and when Trump delivers on his promises. To be fair, small business are feeling incredibly confident at the moment.

Volatility on the stock markets has been muted since the French Elections (red circle), with the exception of May 17th when markets briefly sold off on Trump related worries.

This chart shows the VIX volatility index for the past three months. For reference, a reading below 11 points represents historically low market movement.

Reading the markets we can see a clear flight to safe haven assets.

Gold is at it’s highest levels since the night of Trump’s election (white circle). Currently, it is running into heavy resistance at $1300. If it pushes through that…

The other major flag of safe haven attitude is the action on USDJPY, which has been pushing lower since mid-May and spiked below 109.25 this morning.

Another reason for fear is the declining price of oil. It’s not an issue yet but if the price remains below $50 for an extended period or if it gets much lower, it could be seen as a weakness in the global economy.

The crude oil inventories are coming out this afternoon so be sure to watch closely.

FCC on BTC

Over the past 24 hours we’ve seen new all time highs on Bitcoin and Ethereum. The daily charts for both are looking quite impressive at this point.

The prices certainly could truck further but any retracement could also be very dangerous at this point as this is an extremely risky market.

The Japanese exchange Bitflyer has upped their volume significantly yesterday and at one point had logged 132,000 BTC traded in a 24 hour window.

The revolution is happening there and several supermarkets in the country are already accepting Bitcoin as payment for groceries. Exciting times indeed!

Tomorrow, in addition to all the action in the traditional markets crypto-markets could be moved by a hearing from the FCC in the United States. They have several blockchain experts who will lecture the US government on Financial Innovation and National Security Implications of Virtual Currencies.

Let’s hope we see more integration in more places. 🙂

Have an amazing day ahead!

This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation.
Past performance is not an indication of future results. All trading carries risk. Only risk capital you’re prepared to lose.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Market Overview

Asian Market Update – Wednesday: Asian shares trading higher as Communist Party Congress convenes in China

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Communist Party members

The Big Question: How will markets react to news out of the congress?

Major Asian equity markets were trading higher during Wednesday morning’s trading session, as markets in China and across the Asia Pacific watched the once-in-five-years meeting of the Communist Party of China in Beijing.

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Wednesday morning, President Xi Jinping is delivering a hours-long speech, which can be compared to the US President’s State of the Union speech to Congress, addressing issues ranging from social and economic to military, and so on.

In China, the Shanghai Composite Index was up 0.27 percent to about 3,381 before midday on Wednesday. The CSI 300 Index, which tracks the 300 largest companies listed in Shanghai and Shenzhen, was up 0.48 percent to 3,931 before midday.

In Hong Kong, the Hang Seng Index edged up 0.01 percent to around 28,700 before midday.

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In Japan, the Nikkei 225 was up 0.09 percent to around 21,354. The Nikkei remained in an uptrend on Wednesday, following recent record highs.

In South Korea, the Kospi was down a slight 0.15 percent to around 2,480 shortly before midday. Korean Peninsula tensions are rising again after a North Korean ambassador to the UN warned that a nuclear war “could break out any moment.”

Down Under, the ASX 200 also added 0.08 percent to around 5,894.

The economic data front remain relatively quite on Wednesday, with the biggest market driver today likely to be the Communist Party Congress in China.

President Xi, in his speech, repeated largely familiar themes in terms of economic policy, which included calls for continued implementation of opening and reforms of the Chinese economy.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 21,354 0.09%
China-Shanghai Composite Index 3,381 0.27%
China-CSI 300 3,931 0.48%
South Korea-KOSPI 2,480 -0.15%
Hong Kong –Hang Seng 28,700 0.01%
Australia-ASX 200 5,894 0.08%

Cryptocurrencies

Prices of cryptocurrencies pointed lower overnight during the Asian trading session on Wednesday.

As of midday in Asia, bitcoin was down 1.67 percent to $5,503, that’s about $60 lower than the same time on Tuesday. However, the overall pattern is still showing a healthy consolidation in bitcoin above the support level at $5,500.

Ethereum lost 2.74 percent to about $307 before midday. Ethereum is now near the $300 level after recent surges to as high as $340.

Litecoin was down 3.28 percent to about $57 at midday. Litecoin has now dropped below $60 after several days above that level.

Currencies

The Japanese yen lost 0.07 percent the US dollar at midday Thursday to 112.25 per dollar.

The Chinese yuan gained 0.2 percent against the US dollar, trading at 6.609 per dollar.

The Australian dollar gained 0.03 percent on the dollar, changing hands at 1.2742 per dollar at midday.

Commodities

WTI Oil was flat for the day, trading at $51.90 per barrel.

Brent Crude gained a slight 0.28 percent to $58.21 per barrel.

Gold was up 0.11 percent to $1,286 an ounce.

Business News across Asia

In China, of course, the focus of not only Chinese state media but foreign media outlets is on the speech by President Xi Jinping. As mentioned above, the speech covers a wide range of topics. But if you only take one thing out of it, here it is:

Take away: President Xi reaffirmed earlier calls for opening and reform plans, trying to reassure foreign companies about market conditions and access. Though that’s just talk now, but a talk like that in a such a big meeting, carries a lot of weight.

Featured image from Wikimedia Commons.

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Market Overview

Dow Jones Hits New Record After Brief Stint at 23,000

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The Dow Jones Industrial Average rose to New records Tuesday, powered by stronger than expected earnings for major health blue chips.

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Dow Touches 23,000 In Intraday Trade

The blue-chip index briefly traded above 23,000 before paring gains to settle a mere three points shy of the milestone. The index rose 0.2% to 22,997.44 for a new all-time record.

Sixteen of the Dow’s 30 index members contributed to the rally. UnitedHealth Group (UNH) and Johnson & Johnson were the best performers after each reported earnings that beat forecasts.

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On the opposite side of the ledger, Goldman Sachs (GS) shed 2.6% despite posting better than expected Q3 results.

With the gain, the Dow has now finished in positive territory in 12 of the past 15 sessions. Over that period, it has added 3.2%.

The broader S&P 500 Index also climbed to new highs Tuesday, adding 0.1% to finish at 2,559.36. Health stocks led the gains, climbing 1.3% as a sector.

Meanwhile, the tech-driven Nasdaq Composite Index pared losses to settle flat at 6,623.66.

However, the gains on Tuesday were accompanied by a mild increase in volatility, with the CBOE VIX settling in the double digits for the first time in a week.

Economic Data Largely Positive

The latest batches of industrial production and housing data painted a favorable picture of the U.S. economy. Industrial production – the broadest measure of factory output – rose 0.3% in September, the Federal Reserve reported Tuesday. Analysts had forecast an increase of 0.2%.

A closely watched measure of housing market conditions also strengthened more than expected this month. The National Association of Home Builders’ housing market index climbed four points to 68 for October. That was the highest level in five months.

Upbeat data helped the U.S. dollar notched its fourth consecutive gain on Tuesday. The U.S. dollar index (DXY) climbed 0.2% to 93.51.

The dollar strengthened against the pound and euro, while paring gains versus the yen and loonie.

Featured image courtesy of Shutterstock.

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Analysis

Daily Analysis: Dollar Rally Continues amid Fed Chair Confusion

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Tuesday Market Recap

Asset Current Value Daily Change
S&P 500 2554 -0.09%
DAX 12995 -0.07%
WTI Crude Oil 51.53 -0.66%
GOLD 1287.00 -1.22%
Bitcoin 5652 -0.86%
EUR/USD 1.1751 -0.38%

Yesterday’s trends are mostly continued in financial markets, such as the low-volatility levitation in stocks and the slightly more active trading in currencies with the apparent Dollar strength. The Great British Pound continued to be under pressure amid the amplified Brexit-related worries, but most of the other majors also lost ground to the Greenback.

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The Dollar rally has been fueled by the rise in the odds of some of the hawkish Fed Chair candidates, while overall, the “race” for the positions looks more chaotic than ever. Interestingly, the long-end of the yield curve is refusing to follow the short-term moves, and without the effects of the Fed’s QE program, the yield curve would probably be inverted by now, signaling strong recession risks.

Dollar Index (DXY), 4-Hour Chart Analysis

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The major stock indices are virtually unchanged yet again and even the previously surging Nikkei entered a consolidation, adding to the unusual October lull. Commodities have been quite active thanks to the Dollar’s vigor, with crude oil and gold both turning lower. Oil gave back most of yesterday’s gains as the Iraqi-Kurdish conflict turned out to be less violent than previously feared, and the brief rally fizzled.

WTI Crude Oil, 4-Hour Chart Analysis

Cryptocurrencies

The major coins are having a mixed session at best, as yesterday’s rebound wasn’t durable, and most of the coins turned back lower again. That said, despite the recent choppy price action, the total market cap of the segment is close to its all-time high, even as only Bitcoin is trading near its own record price level.

The optimism regarding Ethereum major Byzantium upgrade wasn’t enough to lift the second most valuable coin today, and the price of the ETH token retreated below the key $330 level after touching $350 yesterday after the upgrade’s lock-in. Ripple and NEO have been among the most active majors today, but with opposing performances, as Ripple fell significantly after yesterday’s break-out attempt, while NEO defied gravity and jumped above the $30 level after a corrective period.

BTC/USD, 4-Hour Chart Analysis

Technical Picture

The S&P 500 is grinding higher despite the overbought short-term momentum readings, and the benchmark is trading very close to its all-time high. The 2550 level is still in focus, but until volatility remains near record lows, the minuscule moves are unlikely to change the technical setup. While a sudden drop in prices could quickly negate the recent break-out, the consolidation could very well lead to further upside, as bulls remain firmly in control, despite the lofty valuation levels.

S&P 500 Futures, 4-Hour Chart Analysis

Key Economic Releases on Tuesday

Time, CET Country Release Actual Expected Previous
02:30 AUSTRALIA RBA Meeting Minutes
10:30 UK CPI 3.00% 3.00% 2.90%
11:00 GERMANY ZEW Sentiment 17.6 20.3 17
12:00 EUROZONE Final CPI 1.50% 1.50% 1.50%
15:15 US Industrial Production 0.30% 0.40% 0.20%
15:15 US Capacity Utilization Rate 76.00% 76.20% 76.10%

Featured image from Shutterstock

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